Hay prices lead to hard decisions

Steamboat Springs  Elk River Farm and Feed has a list of 25 people waiting to buy hay for the winter.

"We've never done that before," store owner Michelle Townsend said.

In fact, there's a lot of things that the local store has never done before when it comes to this year's hay business.

For one thing, Townsend has never had to sell horse hay for the going price of $150 a ton when it arrives at the store. She even heard that some people were picking up hay for $200 a ton in south Routt.

"That's the highest it's ever been," she said.

The store also is getting its hay shipments from all over the West, including Utah, Wyoming and the Front Range, to meet the demand.

"Typically, on most other years, we get it all locally," Townsend said.

That's one effect that the lack the supply of good hay is having locally, thanks to a late spring frost and a desert-like drought in the summer that devastated crop yields.

In late August, Extension Agent C.J. Mucklow estimated that irrigated hay was 30 percent off its normal yield, while dry-land hay is anywhere from 40 to 100 percent off depending if the rancher felt like it was worth the expense to cut the crop.

What hay has been harvested is a higher quality crop used for feeding horses.

Lower quality hay, which is used to feed cows at $60 a ton, just can't be found in the Yampa Valley, Mucklow said.

Ranchers who, on normal years, only grow enough hay for themselves or depend on buying hay each year are wondering if it will be more sensible to sell their cows now and avoid high hay prices later.

"We're selling more livestock now, due to the dry weather," auctioneer Wayne Kruse said. Kruse owns Centennial Livestock Auction in Fort Collins."(Ranchers) just don't want to pay the high prices for hay."

Earlier this year, ranchers feared that a mass selloff of cattle would reduce beef prices. But the increase in supply of cows hasn't completely saturated the market so cattle prices remain high.

"The price of cattle is not cheap," Kruse said.

He estimated a well-bred cow costs between $600 to $700, while "poor quality" animals are in the $400 to $500 range.

But after the winter, the price will be even better in the spring, which is making for some tough decisions on whether to sell cattle now or not, Kruse said.

"If we get any moisture at all from the winter, (cattle) will be worth more in the spring," he said.

That has caused the ranchers who do have hay to take advantage of the increased supply of cattle to double up on their winter stock.

Kruse said ranchers expect to be able to turn around and make a good profit in the springtime.

Meanwhile, large hay growers in the area aren't having as many problems with cattle operations. Local rancher Mike Hogue said his hay revenue will be down this year because his yields were 50 to 66 percent below his normal. But he'll have enough to feed his cattle through the winter.

That's what rancher Doug Carlson is seeing to be typical in his neck of the woods.

"Up here in Clark, I don't think they're selling that much cattle," he said. "People probably have enough hay to feed their stock."

But low hay yields meant Carlson, who normally grows enough for himself, wasn't able to buy steers that he usually feeds though the winter.

"I did have a change in the program a little bit," he said. "It will affect our cash flow for next year."